New Delhi, Feb 7 (IANS) Fitch Ratings has assigned Indian Railway Finance Corporation’s (IRFC) proposed US dollar Regulation S/144A senior unsecured notes a rating of ‘BBB-‘.
The net proceeds of the notes, which will be issued as part of the IRFC’s existing $2.0 billion global medium-term note programme, will be used for funding the acquisition of rail assets that IRFC will lease to Indian Railways, and to meet the debt-financing requirements of various entities in the railway sector.
The rating is contingent upon the receipt of final documents conforming to information already received and details regarding the amount, coupon rate and maturity, Fitch said.
IRFC has also filed the draft prospectus with market regulator Sebi for its listing in India in the near future.
IRFC is to launch its global bond sale to raise up to $1 billion to support the railway infrastructure build-up.
The borrowing arm of the Indian Railways may launch the bonds with maturities up to 30 years. These bonds, known as 144A in market parlance, would be sold to all international investors, including in the US.
The 144A bonds fall under ‘Rule 144A’ issued in 1990 that modified a two-year holding period requirement on privately placed securities by permitting QIBs to trade these positions among themselves. Prior to this the holding period for such private stock was different.
A 144A bond offer is a US-based offering, and is typically considered an alternative to the costly initial public offering.